Science Blog runs a piece about the economics of oil pricing and alternative energies, with a allusion to the environmental effects of the combination of those factors. While noting that a conspiracy among oil producers is unlikely—impossible, I would say—alternative energies do actually represent a threat to them. If alternative fuels became an inexpensive reality, then it would be to the producers benefit to pump a much oil at whatever the price to get rid of a depreciation asset. Cheap oil would mean that more of it was used and that, we’re told, is bad for the environment.
Is oil pricing itself out of the market?
University of Alberta researcher Andrew Leach likes the way Saudi Prince Alwaleed bin Talal thinks.
A new paper by Leach, an associate professor in the Alberta School of Business, and fellow University of Alberta economics researcher Ujjayant Chakravorty, posits scenarios that parallel a statement Alwaleed made in May declaring that it is in the best interests of Saudi oil producers to keep oil around the $70 mark to prevent the West from developing alternative energy sources. Their paper, co-written with a colleague from the Toulouse School of Economics , hypothesizes scenarios wherein a narrowing of the gap between developing renewable energy resources and fossil fuel resources might mean a rush to drain the oil from its source.
But . . . will we need oil for 100 years?
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